President Trump goes back in time

to the 1970s

to stop a master criminal

from stealing top secret technology.

Welcome back to China Uncensored.

I'm Chris Chappell.

On Monday August 14,

President Donald Trump announced an investigation

into China's unfair trade practices.

“The theft of intellectual property by foreign countries

costs our nation millions of jobs

and billions and billions of dollars

each and every year.

For too long,

this wealth has been drained from our country

while Washington has done nothing.”

Yeah, Washington.

All you do is hang around

with that smug look on your face.

Anyway, Trump authorized

US Trade Representative Robert Lighthizer

to use the Trade Act of 1974

to investigate China's unfair policies and practices—

especially with regard to

the theft of American intellectual property.

What's that, Shelley?Trump actually ordered Lighthizer

to look into whether to investigate China

for unfair trade practices?

So it's like a pre-investigation investigation.

But wait!

My favorite Chinese state-run media

was quick to inform us that Trump's trade war,

sorry, investigation,

sorry, pre-investigation,

could backfire.

It says “China is expected to retaliate.”

And then it suggests that

“China should make use

of the World Trade Organization mechanism

to sue the US for trade protectionism.”

The angry reaction from Chinese state-run media

tells us one thing:

Trump's pre-investigation is a great idea.

Even Democrats are supporting

Trump's tougher stance on China trade.

Here's what's behind it.

For decades, the Chinese Communist Party

has been using a variety of unfair

and even downright illegal methods

to steal foreign technology

and then use it to outcompete the companies

that invented that technology.

Remember how I talked about WeChat?

Yeah, they borrowed a lot of their ideas

from foreign companies.

But what President Trump is referring to is more specific.

It's about investigating whether the CCP

is forcing or pressuring American companies

to share their intellectual property

with Chinese companies.

The CCP has the long-term goal

of having Chinese companies learn from Western companies

and eventually replace them.

For example,

Ford Motor Company wanted to open

a bunch of car manufacturing plants in China.

But the Chinese government had a requirement:

Ford had to do it as a joint venture

with a local Chinese company,

Chang'an Motors.

And as another condition of access

to the Chinese market,

the Chinese government forced Ford to open

a research and development laboratory in China,

that they also had to share with Chang'an Motors.

There was a similar case with General Motors.

GM wanted to sell its electric hybrid Volt car in China.

The Chinese government provides huge subsidies

on qualifying electric vehicles,

as much as $19,000 off the retail price

of each car.

It's to encourage Chinese consumers to buy them.

But they refused to give the subsidy for GM's Volt.

That is, until GM agreed to transfer

some of their highly sensitive engineering technology

to a local Chinese competitor.

Here's another example:

Under a recent Chinese cybersecurity law,

US technology companies are required

to store user data from Chinese customers

on servers inside China.

And according to this article,

technology firms are forced

to “turn over source code and encryption software

to the government,

potentially giving the Chinese government

a back door into private data

and proprietary technologies.”

Plus, this article about Apple says that

provincial authorities plan to

“create a working committee

chaired by communist party members

to oversee the US company's iCloud facility”

that they're building in China.

And I could go on and on with examples,

but you get the idea.

The CCP is forcing US companies

to turn over intellectual property

in exchange for being allowed

to do business in China.

So what President Trump did on Monday

was authorize US Trade Representative Lighthizer

to determine whether China should be investigated

for this under the Trade Act of 1974.

If Lighthizer decides to investigate,

and then if unfair trade practices are found,

the president can punish China

by imposing tariffs or other restrictions.

“And this is just the beginning.

I want to tell you that.

This is just the beginning.”

The Trade Act of 1974 was used widely

during the Reagan era,

but hasn't been used as much in recent years,

because of a requirement to work with

the World Trade Organization before using it,

which Trump has implied he might not do.

But it's not like previous administrations

did nothing about the Chinese Communist Party's

intellectual property theft.

For example, under President Obama,

the White House focused on cracking down

on the CCP stealing intellectual property

by using hacking and cyber spying.

The Justice Department even brought criminal charges

against PLA soldiers for hacking into US companies,

including Westinghouse and US Steel.

But it's not an easy issue to deal with,

since the Communist Party's intellectual property theft

stretches back for decades.

According to this article,

“China's relentless quest to be a technology leader

has deep roots,

stretching as far back as the 1950s.”

And in March of 1986,

the CCP began the “863 Program.”

A

ccording to the Office of the National Counterintelligence Executive,

Project 863 “provides funding and guidance

for efforts to clandestinely acquire US technology

and sensitive economic information.”

That was 1986.

But China's intellectual property theft

really kicked off in 2001,

when China got access to the World Trade organization.

President Clinton did the leg work

to get China into the WTO,

and President Bush finished the job.

Their idea was to give US companies

better access to the Chinese market.

But what US companies got was this:

“Congressional leaders say China is engaged

in economic espionage on a scale

never seen before.”

So maybe, just maybe,

the WTO mechanisms aren't doing

what they're supposed to

to protect American companies.

That's why President Trump is pulling

an obscure 1974 law out of the dusty,

avocado-green filing cabinet—

and putting it to its original purpose:

Giving the US government the power

to punish foreign countries

for unfair trade practices.

So will work?

Well, it's going to be a long process.

For example,

if the US trade representative

decides to investigate China,

it may take up to a year for that to finish.

But one thing's for sure.

The CCP doesn't like it.

And they wouldn't express “grave concern”

if it were nothing.

Thanks for watching China Uncensored.

Once again, I'm Chris Chappell.

See you next time.

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